Future economic growth from cutting import tariff rates is forecast to be no more than 5% compared to 10-15% from initiatives like China’s Belt and Road strategy, he told a Christchurch audience.
“We should have a new kind of innovation to make globalisation work,” the academic, former diplomat and author said on his first visit to New Zealand and the South Pacific.
China is investing billions in land and maritime connections around the world, most notably on the ancient Silk Route between Asia and Europe but also in Africa and Pacific nations like Fiji, Samoa and Tonga.
From 2008-11 Wang was a diplomat at the Chinese Mission to the European Union and is director of the Centre for European Studies at Renmin University of China, where he specialises in Belt and Road policy and EU-China relations.
Wang offered NZ a heads-up on China’s geopolitical goals, saying traditional approaches to globalisation, like the single-minded pursuit of bilateral free-trade deals will soon become antiquated.
He argues while other world powers like the United States act like Atlas holding up the globe, China is trying to pump air into the globe.
“China provides,” he said.
As the author of several books on Chinese foreign policy Wang said Belt and Boad can help NZ become a hub in a network of international ports.
Many associate the policy with financing for infrastructure like railways creating a new Eurasian land bridge but it is actually about connecting people and economies, he said.
It is not about China exerting financial or political influence at the expense of other nations.
Africa still has 500 million people living without electricity and India has 300m in the same position.
“We need a more inclusive globalisation,” he said.
“Geopolitics divided the world, mutual connectivity can unite it.”
Wang’s message of shared prosperity did not resonate entirely with his audience at Canterbury University.
One man leaving the lecture hall after Wang’s talk turned to a friend and said “What’s good for China is good for everyone, surprise, surprise”.
A controversial part of Wang’s lecture, hosted by the NZ Institute of International Affairs, was his backing for Pakistan’s claim over the Kashmir region, an ongoing source of tension between Pakistan and China’s historic economic and political rival, India.
Wang said Pakistan is a great friend of China and its investment in Pakistani infrastructure, which started in the 1960s, will help it rise from a potential failed state to a global middle power by 2030.
A Pakistani post-graduate student at Canterbury suggested to Wang that China’s support for Pakistan is bolstering its military capability and creating a deep state within the country that makes the world more unstable.
Wang said China does not pick sides nor does it expect investment and trading partners to follow its direction.
“I think that’s a misunderstanding about Chinese culture. Chinese culture is a learning culture. Like we learn Buddhism from India but we never sell (Chinese) Taoism to India or any other countries.”
Wang said NZ is already anticipating the future of Belt and Road trade with automated port technology that moves goods faster than people.
More investment in digitisation of shipping services and customs facilities could help NZ renovate and promote its existing free-trade trade agreements.
Belt and Road would benefit NZ more than continuing to look for tariff cuts in milk exports to China, for example.
Citing a McKinsey consultancy study Wang said the maximum economic growth from a tariff-based, country-to-country approach to trade is 5% compared to 15% from mutual global connectivity.
NZ could be an economic hub for the movement of goods and services from Asia to South America and the Pacific Rim if it concentrates on digital innovation, he said.
“A new hub in a mutually connected world, not just bilaterally. All this milk that sells to China, it’s not enough. You need to have a more innovative culture, digitising ports and all kinds of new ways.”
Wang said it is up to NZ if it wants to benefit from China’s method and he disagrees the country is pushing “soft power” through Belt and Road investment.
“Soft power in Chinese understanding is not teaching other people lessons. You cannot guarantee you are the teacher.”
China itself learnt from the West then internalised and adapted the teaching to suit its own culture.
NZ could do the same embracing Belt and Road, he said.